Nuclear Power Plants Shutdown and Alternative Power Plants Installation–A Nine-region Spatial Equilibrium Analysis for the Electric Power Market in Japan
AbstractAfter the Great East Japan Earthquake and the subsequent nuclear accident, nuclear power stations cannot be considered safe any longer and, thus, can be hardly allowed to restart in Japan. In this study, we develop a nine-region spatial equilibrium model for the Japanese power market and simulate two-part situations: (1) none of the nuclear power plants can operate any longer and (2) gas turbine combined cycle (GTCC) power plants are installed to fully cover the lost capacity of the nuclear power plants. When all the nuclear power plants are shut down, the average power prices would rise by 1.5–3 yen/kWh. By substituting their capacity with the GTCC power plants, we could compress the average price rise as high as 0.5–1.5 yen/kWh compared with the status quo. Their impact, however, would differ by region on the basis of the share of nuclear power in their plant portfolios. When nuclear power is fully available, inter-regional transmission is mainly driven by the abundant base-load capacity, including nuclear power, during the nighttime. After the nuclear power plant shutdown, the regions with abundant nuclear power capacity would not be able to afford to sell their power to other regions and this would cause less serious congestion at the inter-regional transmission links. The installation of GTCC power plants would make the plant portfolios more similar among regions and, thus, reduce inter-regional transmission further, which causes congestion very rarely.
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Bibliographic InfoPaper provided by National Graduate Institute for Policy Studies in its series GRIPS Discussion Papers with number 12-11.
Length: 33 pages
Date of creation: Oct 2012
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-13 (All new papers)
- NEP-ENE-2012-10-13 (Energy Economics)
- NEP-URE-2012-10-13 (Urban & Real Estate Economics)
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